September 14, 2015

Digital Disruption—the Bottleneck of Chief Officers

So called Digital Disruption can be seen miles ahead, and does not come as a surprise to anyone in the affected industry. Typically it’s visible on the radar some 5-10 years—and often longer on the principal level—before it actually turns into a significant parameter for ongoing operations.

Changing behavior

Change really means, changing behavior. From a Chief Officer’s perspective, it boils down to three key points:

  • True leadership
  • Timing
  • Pace

In this blog series I will go through these points, and do my best to give you my advice and thoughts. You are most welcome to agree or disagree, because change is hard and it requires a lot of work.

True leadership

Within the organization the sense of digital disruption urgency is always present. One can be certain to find smaller or larger groups arguing for actions related to the new game. The bottleneck stopping these groups from having the right impact on the operation is, in general, the static quality of Chief Officers.

At the core, Chief Officers, work with cutting costs and increasing revenues, constantly monitoring programs and actions for growth. But, with digital disruption this familiar game is eroding. Chief Officers pretty much know this, but use inefficient coping strategies that can be summarized in one word; externalization.

Externalization includes engaging in-house experts, task forces, external experts, management consultants, and more, to investigate the changing game. The externalization strategy demands clear cut answers, certainties, exact times, cost benefit analyzes to the last decimal.

  • One outcome of this dysfunctional Chief Officers’ coping strategy is the eventual buy-in to some [often external] prophet claiming to have the answer. The blunt truth is that there is no such clear answer. Disruption means uncharted ground in a complex elastic system of: investors, stakeholders, business models and in-house resources in a broad sense, competitors, customers, and the society at large. Probability of failing is high when following a prophet. At high cost.
  • Another outcome of the dysfunctional coping strategy is that fear and uncertainty make Chief Officers ask one more question, demand one more decimal in the cost benefit analyses, and the like. This seemingly professional and executive way soon will suck energy out of the initiative. It will lose momentum and eventually self die.

To make things even more difficult, digital disruption affects Chief Officers in lateral ways, demanding cooperation and shared responsibilities on goals and resources within the corporate operation as a whole. For example, harmonizing Multiple Touch-Points for Customer Journeys blurs boundaries between marketing, sales, product development, customer service, HR, and more. Traditionally, Chief Officers has goals assigned to their particular area of responsibility. KPI:s or similar indexes are used to monitor progress—each Chief Officer being held responsible for her set. With digital disruption this funnel perspective on the operation will break.

True leadership is about dropping the guard. It’s about embracing uncertainties and engaging in deep dialogues and cooperation in line with the challenges ahead. This includes putting oneself at risk with phrases such as ‘I believe in...’ and ‘I personally want for us to...’

I suggest that Chief Officers in general are less flexible and less prone to changing behavior than the average person in their own operation! If digital disruption really is on the radar, the group of Chief Officers is where you have to start changing. This is where the lever will get momentum if applied. And applied it must be; in true cooperation with other Chief Officers.

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